Expanded gambling pushed to ease budget

Published 8:23 pm, Monday, January 10, 2011

Racetrack and casino interests have tried before to convince lawmakers to expand gambling in Texas, only to come up empty-handed.

Now, with the state facing a budget shortfall of about $27 billion, those interests are back and pitching expanded gaming as a cure for the Lone Star State's financial woes. Racetrack operators also say it's the last shot to revive their floundering industry.

Adding slot machines at 13 tracks around the state and three Indian reservations will add $1 billion annually to the state's coffers, racetrack operators contend. Another group that supports casinos, meanwhile, says the opening of anywhere from four to eight destination-resort Las Vegas-style casinos around the state — including in San Antonio — will produce even more money for the state. The Texas Gaming Association, the casino group, expects to release financial projections next week.

Most Popular

Opponents, however, question the estimates and counter that the sociological costs — such as crime, addiction and even bankruptcy — overshadow any benefits.

Expanding gaming requires a vote of two-thirds of the Legislature, with voters getting the final say. A new poll of Texas adults done for the San Antonio Express-News and other major newspapers in the state found 60 percent favored an expansion of gaming.

Expanding gaming may be a last-ditch attempt at saving racing. Without slots, Texas racetrack operators say, they won't have the additional revenue to increase purses and attract quality racehorses as has been done in Louisiana, Arkansas, Oklahoma and New Mexico.

“You will likely see the fall of several players,” predicted Andrea Young, president and chief operating officer of Sam Houston Race Park in Houston. She wouldn't say whether Sam Houston would be one of them.

Bryan Brown, chief executive of Retama Park in Selma, had an even more fatalistic view if lawmakers can't be persuaded.

“Our industry, over a period of years, will just disappear,” Brown said. Retama hasn't turned a profit since opening in 1995.

Texans spend some $2 billion annually at racetracks and casinos in surrounding states, according to Win for Texas, the racetracks' lobbying group. It asks: Why not have residents spend that money here?

Expanding gaming is a preferable alternative to raising taxes or slashing spending on education or other vital programs, Brown added.

In the last legislative session two years ago, the racetracks, horse owners and breeders couldn't come to any sort of agreement. This time is different, they say.

“We have been working together for several months to come to an agreement on provisions in one bill,” said Dave Hooper, executive director of the Texas Thoroughbred Association, which represents owners and breeders. “This is a milestone we've never reached before.”

Under the racing industry's proposed legislation, the state would get 30 percent of the slots revenue. The tracks would keep 58 percent, and the remaining 12 percent would be earmarked for purses and other items for the horse and greyhounds industries, Hooper said.

If slots pass, Sam Houston's Young said it will spend $350 million for new facilities, gaming terminals and other amenities. Retama expects to spend $200 million.

Young pointed to Parx Casino in Philadelphia as a venue she'd like to emulate, raving about how well it has integrated slots (and table games) with horse racing.

“It feels like you're walking into a Vegas-style casino,” she said, referring to the layout and finishes.

In the last legislative session, the Texas Gaming Association, which represents casino operators, including the Las Vegas Sands Corp., proposed adding up to 12 casinos in Texas. This time, they are proposing only four to eight casinos. Three would be in the largest counties: Bexar, Harris and Dallas, and at least one other would be in a coastal town, said spokesman Scott Dunaway.

“Our proposal is an economic developer and a job creator,” Dunaway said.

Proponents of expanded gaming may be facing long odds. Rep. Lon Burnam, a Fort Worth Democrat who participated in a forum on gambling expansion last summer, noted that at least 50 of his colleagues wouldn't vote for it on religious grounds.

And Burnam is skeptical expanded gaming would have the economic impact that proponents say it would.

“While I'm not saying I'm close-minded about any of these things, I'm a classic doubting Thomas,” he said.